State-owned lender experienced a spectacular upmove and doubled investors’ money in the last month. Shares of the PSU bank surged over 110% to Rs 32 in this period. In comparison, the Nifty50 has surged only about 2%, while Bank Nifty has risen nearly 5% during the same period.
At 10.29 am, the scrip was trading 6% higher at Rs 30.8 over its previous day’s closing price of Rs 29.05 per share. With a market capitalisation of Rs 36,824 crore, the midcap stock has zoomed 182% in the past six months, from its 52-week low of Rs 10.5.
The stock also touched its 52-week high of Rs 32 per share today.
“Investors should keep holding their positions as long as it sustains above the major support 22 levels. In the near term, it has a resistance of 28 levels. I believe that UCO Bank has the potential to climb further up to 36 and then 44 levels,” said Rameshver Dongre, Research Analyst – Equity Research at CapitalVia Global Research.
The stock, which has given over 180% return in the last six months, hardly has analyst coverage.
In Q2, most PSU banks reported stellar earnings coupled with improvement in asset quality and rising credit growth numbers. Besides, state-owned banks also reported healthy NIMs, which analysts believe might be sustainable for another quarter as rising deposit rate hikes may be passed with a lag.
Morgan Stanley analysts said PSU banks should see relatively higher margin expansion compared to many private banks over F22-F24, reflecting a higher starting point of liquidity, sharp moderation in NPA formation, reducing interest income reversals and lower share of wholesale deposits relative to select private banks.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
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